Posted on April 3, 2022

Warehousing is a requirement for most businesses that manufacture, import, export, or transport goods. You might see it as an unnecessary expense, but it can actually save you money and boost your productivity. The customer journey doesn't end when an order is placed. A warehouse gives you better control over your inventory and ensures that customers will receive their products on time, which ultimately leads to higher profits.

Better Inventory Management

Approximately 8 percent of small businesses don't track their inventory. About 24 percent don't have inventory at all. This often leads to late shipments, delayed order processing and poor customer experience.

Warehouses provide a centralized location for your goods, making it easier to track and manage your inventory. By investing in a warehouse, you'll store, ship and distribute products more efficiently. If something is out of stock, you'll know it right away and provide customers with alternative options rather than leaving them waiting for days or weeks.

More Efficient Packing and Processing

Most warehouses provide the equipment and supplies you need to store, move, package and process orders from customers. Pallet racks, loading docks and packing materials are just a few to mention. This way, you'll have everything in one place, which will save you time and money.

A warehouse enables businesses to pack and grade their goods according to legal requirements and customer needs. The logistical cost is reduced, while flexibility is maximized. This type of facility can be an ideal distribution location, eliminating the need to arrange for pickup and hire employees to manage fulfillment.

Superior Customer Service

More than 63 percent of online customers expect to know the estimated or guaranteed delivery time. Approximately 88 percent would pay more for faster delivery. In fact, delivery speed is one of the first things buyers take into consideration when choosing a shipping carrier.

As a business owner, you want to keep your customer satisfied and engaged. If you fail to deliver their orders on time, your reputation will suffer. This can hurt your revenue and brand image.

Warehousing allows for timely delivery and optimized distribution, leading to increased labor productivity and greater customer satisfaction. It also helps reduce errors and damage in the order fulfillment process. Plus, it prevents your goods from getting lost or stolen during handling.

Ensure Price Stabilization

The demand for goods and services varies from month to month and year to year, depending on customers' income, government policies, employment rates, climatic conditions and other factors. A warehouse allows you to store your products for a later date when the demand is high. This helps ensure price stabilization and reduces revenue losses.

Let's say your company manufactures and distributes sports equipment. If you offer ski accessories, you can store them in your warehouse rather than selling them for next to nothing when the cold season ends. This way, you'll maintain consistent stock levels and maximize your profits.

Improved Risk Management

Warehousing not only protects against price fluctuations but also provides safe storage of perishable products. Depending on your needs and type of business, you can lease a warehouse equipped with refrigerators, freezers and optimal temperature control.

Plants, artwork, candles, food and medications are just a few examples of goods that require cold storage. A warehouse that offers this service will store your goods at the right temperature, preventing spoilage and changes in color and texture. This also helps extend the product’s shelf life and ensures customer satisfaction.

Additionally, the products stored in warehouses are typically insured. This means that you have higher chances to receive compensation from your insurance company in case of damage, fire or theft.

Original article: https://smallbusiness.chron.com/importance-warehousing-logistics-system-74825.html